Residential values to increase due to local sales
Phillips County Assessor Doug Kamery reported that Phillips County real property owners will receive a 2021 Notice of Valuation in early May. This document is the result of a countywide reappraisal and reflects changes in market values over a two-year period. The values on these notices will reflect what the property owners value will be for the 2021-2022 tax years.
Under Colorado law, county assessor’s offices throughout the state conduct a complete reassessment of all properties in their county every two years. As a result, property tax assessments are always lagging current market conditions.
The 2021 valuations will be based on a June 30, 2020, level of value, using market sales data from July 1, 2018, through June 30, 2020. Any recent market conditions that have occurred between June 30, 2020, and today will not be taken into consideration when establishing the new 2021 valuations. These factors will not be recognized until the 2023 reappraisal cycle.
During the two-year period between June 2018 and June 2020, the number of residential sales remained consistent with past years; however, the sale prices of these transactions increased substantially. Colorado law requires that all residential property values be determined solely by the market approach to value, also commonly referred to as the sale comparison approach.
In some cases, residential home values may increase anywhere from $20,000 to $90,000 or more based on comparable sales in the county.
“Even though COVID hit in the last four months of this cycle, we are seeing little to no effect on sale prices,” said Kamery.
The commercial market has shown a slight increase this appraisal cycle.
Appraisal of agricultural land for ad valorem taxation purposes involves an “agricultural landlord formula.” In the formula, the net income to the landlord is calculated using a 10-year averaged published commodity price or grazing rental rate multiplied by the local production yield (2010-2019 for 2021). This yield is based on soil classification or carrying capacity.
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